AVCJ Awards 2015: Deal of the Year - Early Stage Technology: Ninebot

Ninebot, which started out as an online crowdfunded project in 2012, is known for manufacturing two-wheeled, self-balancing personal transport vehicles for one person. The concept and design inevitably invited comparisons with US-based counterpart Segway.

These comparisons were previously a source of tension between the companies. Last September, Dean Kamen, Segway's founder, filed a trade complaint with the US authorities against Ninebot. According to the complaint, Ninebot and other Chinese companies had infringed Segway's patents.

Segway has been in business for 15 years and has accumulated a weighty portfolio of more than 400 patents. While the compliant has yet come to any official conclusion, earlier this year, Ninebot announced it had bought its US rival, supported by $80 million in Series A funding. Sequoia Capital, Shunwei Capital Partners and WestSummit Capital all participated in the round, alongside Chinese smart phone maker Xiaomi.

Xiaomi and Shunwei have been pursuing investment opportunities in the internet-of-things (IoT) space. Xiaomi specifically was drawn to the work that Ninebot had already put into making its vehicles internet-capable; it hoped to add the electric vehicles to its own Xiaomi smart device ecosystem.

"We invested in Ninebot last year and this year we re-upped because the company needed money to do that acquisition, which we thought was a great idea," says Neil Shen, founding and managing partner of Sequoia China.

Ninebot acquired all of Segway's assets and Segway become a wholly-owned subsidy of Ninebot, although two brands remain separate. Raymond Yang, managing partner at WestSummit, previously told AVCJ that Ninebot's purchase could help Segway, as high prices and lack of innovation have seen the company lose out to other emerging players.

Prior to the acquisition, Ninebot was already distributing products in 60 countries. The company now has at its disposal Segway's 250 distribution channels in 80 countries. The two brands could be sold side-by-side or Ninebot might choose to re-brand its own vehicles under the Segway name.

Lufeng Gao, Ninebot's founder and CEO, sees huge potental in the short-distance transportation market globally. He tips this segment, as well as the mobile robotics platform industry, to see substantial growth over the next 10 years. As such, the start-up will continue to expand its product portfolio. It will apply a series of technologies, including electric driving, mobile internet, and human-computer interaction, in developing the future of transportation.

"With acquisitions like that you probably need to be opportunistic. But I do see some interesting IoT companies from China, such as Huami Technology, which is part of Xiaomi ecosystem, and DJI. These are different from O2O companies in that they tend to enter the international market more aggressively," says Shen.

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• Topics
• Technology
• Greater China
• Early-stage
• Venture
• Technology
• China
• Venture
• Sequoia Capital
• WestSummit Capital
• Shunwei Capital Partners
• Xiaomi
• AVCJ Awards